US STOCKS-Wall St set for subdued open as Trump's auto tariffs sap sentiment

By Pranav Kashyap and Johann M Cherian

March 27 (Reuters) - Wall Street's main indexes geared up for a muted open on Thursday, as President Donald Trump's latest tariff gambit sent auto stocks into a tailspin, while investors sifted through a slew of economic indicators.

In a late-night announcement on Wednesday, Trump unveiled his plan to implement 25% tariffs on imported cars and light trucks effective next week, while those on auto parts are expected to begin from May 3.

Automakers, with sprawling supply chains crisscrossing North America, faced declines in premarket trading. General Motors GM.N took a 5.9% hit and Ford F.N dipped 0.1% in choppy trading. Car-parts manufacturers like Aptiv APTV.N and BorgWarner BWA.N each shed 2% and 1.3% respectively.

Tesla TSLA.O was up about 1% after a 5.6% drop in the previous session.

Shares of Japanese, European and South Korean automakers, who heavily depend on the U.S. as a key export market, also suffered setbacks. MKTS/GLOB

Trump's mercurial trade policies have injected a dose of uncertainty into the markets, as investors fret over potential disruptions to supply chains, hampered investment, and the specter of inflationary pressures threatening global economic growth.

Trump has also pledged to impose reciprocal tariffs on trade partners in early April, though he has intimated that these policies might be subject to flexibility.

Investors fled to safe-haven assets, driving gold XAU= to record levels, with bullion miners such a Newmont and Barrick Gold up about 2% each.

Kyle Rodda, senior financial market analyst at Capital.com, said "the big concern is that not only will these tariffs be disruptive and economically harmful, but it indicates that the Trump administration's shake-up of global trade won't necessarily end with next week's April 2 announcement of reciprocal tariffs, as previously hoped."

At 8:45 a.m. ET, U.S. S&P 500 E-minis EScv1 were down 2.75 points, or 0.05%, with 191,468 contracts changing hands, Nasdaq 100 E-minis NQcv1 were down 27.5 points, or 0.14%, and Dow E-minis 1YMcv1 were up 53 points, or 0.12%.

Final fourth-quarter's gross domestic product (GDP) showed a 2.4% increase, compared to forecasts of 2.3%. Simultaneously, initial jobless claims for the week ended March 22 were 224,000, broadly in line with estimates of 225,000.

The highlight of the week's economic indicators is the personal consumption expenditures price index — the Federal Reserve's favored inflation gauge — scheduled for release on Friday.

Investors have trimmed their exposure to U.S. equities, dragging both the S&P 500 .SPX and the Nasdaq .IXIC down by 10% from their record peaks earlier in the month, thus entering technical correction territory.

Both indices are on course to conclude the first quarter of 2025 in negative territory, with the benchmark index poised for its first quarterly decline in six quarters, while the tech-centric index braces for its largest quarterly drop in nearly two years.

Fed policymakers, including Susan Collins and Thomas Barkin, are anticipated to share their economic insights later today, likely reaffirming the central bank's cautious approach to monetary policy.

Among other stocks, Advanced Micro Devices AMD.O lost 3.4% after Jefferies downgraded the chip stock to "hold" from "buy".